The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government and private sector were yesterday urged to form “a magical partnership” to combat high unemployment and escalating levels of violent crime.

Speaking ahead of today’s 2016-2017 Budget communication, Edison Sumner, the Chamber of Commerce’s chief executive, told Tribune Business that the Government needed to prioritise improvements in the ease - and cost - of doing business in the Bahamas.

And, in return, the private sector needed to ‘play by the rules’, competing on “a level playing field” and ensuring that all aspects of society - including the Bahamian taxpayer and consumer - benefited from their activities.

“The only way we can fight the unemployment levels, and the crime issue in the country, is if we have businesses and companies prepared to hire people, and people going into business and creating opportunities for themselves,” Mr Sumner told Tribune Business.

“To reduce crime, there has to be a magical partnership between the Government and the private sector to move the economy forward.”

He added: “For that to happen, the Government has to demonstrate it will cause improvements to the ease of doing business in this country.

“The private sector has to show it’s compliant with the rules, and not participating in the underground or informal economy, but operating in an economy where there is a level playing field and where we all benefit.”

Mr Sumner confirmed that specific initiatives and strategies to improve the cost, and ease, of doing business in the Bahamas were among the private sector’s chief requirements for this morning’s Budget communication by Prime Minister Perry Christie.

The Bahamas’ ranking in the World Bank’s ‘ease of doing business’ ratings has declined progressively in recent years to 106th spot, and is viewed as a symptom of a despair malaise undermining this nation’s economic competitiveness and efficiency.

“Right now, the business community is suffering from the high cost of doing business,” Mr Sumner emphasised.

“We’re looking for improvements and initiatives from the Government to cause doing business in the Bahamas to be more efficient, and less expensive.

“Right now, the country is one of the most expensive for tourism and the cost of living, and we’d like to see that reduced.”

With a general election less than one year away, the 2016-2017 Budget is unlikely to include any new taxes, or increases to existing ones, given the increased burden imposed on Bahamian consumers and businesses by Value-Added Tax’s (VAT) implementation.

The only potential driver of new or increased taxes would be the proposed National Health Insurance (NHI) scheme, with the Christie administration instead likely to focus on improved revenue collection and administration, and tinkering with certain import duty rates.

Mr Sumner, meanwhile, said the private sector was hoping this morning’s Budget would include “the review and consideration for the restructuring of the Business Licence regime in the country, including the fees imposed on businesses”.

That alludes to the promise, contained in the Government’s initial 2013 tax reform ‘white paper’, that Business Licences would be reduced to a flat $100 fee across the board once VAT was implemented and meeting revenue targets.

Mr Sumner also expressed hope that the Government will raise the turnover threshold, above which companies have to hire an accountant to certify the accuracy of their financials, from $100,000 to $400,000 for Business Licence fees.

That is intended to ease the burden on Bahamian small businesses, and Mr Sumner said the Chamber’s proposal to take over management of the Business Licence register on the Government’s behalf remained on the table.

“We’re expecting to advance these discussions in the weeks and months to come with the Government,” Mr Sumner said of the Register proposal, “so hopefully by the time we get into the New Year and the mid-year Budget, and certainly by the time of the 2017 Budget, we will have that initiative implemented by then.”

Mr Sumner said the Chamber was also looking for initiatives to incentivise Family Island development in this morning’s Budget, going beyond the exigency orders and relief announced in the aftermath of Hurricane Joaquin.

Apart from the now much-anticipated update and announcement on Baha Mar, today’s Budget is likely to contain more spending than taxation initiatives, given the Christie administration’s desire to ‘sweeten up’ voters ahead of the upcoming general election.

The Government will be keen to unveil progress on its 2012 campaign promises, so progress updates on initiatives such as NHI, mortgage relief and foreign direct investment (FDI) projects in the pipeline are likely to feature prominently.

Besides painting a ‘rosy’ economic outlook and taking jabs at the Opposition, the Prime Minister will also likely laud his government’s ‘achievements’ - VAT and fiscal consolidation; BEC/energy reform; the legalisation of web shop gaming; and the recent agreement with the Grand Bahama Port Authority (GBPA).

Ongoing initiatives will also feature, with the Prime Minister likely to mention progress on mobile liberalisation and when the second licence will be issued to the Cable Bahamas-managed NewCo. Programmes for apprenticeship, and tackling youth unemployment, will also be included.

Outlining his Budget expectations, K P Turnquest, the Opposition’s finance spokesman said: “I’m expecting pretty much more of the same that we’ve had for the last four years.

“I’d be very pleased to hear something that’s new and definitive.”